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Macau Losing Bet for MGM Mirage, Wynn Resorts?


Chinese government could present problems.


Greetings from New York where, in the interest of my always beloved full-disclosure, I've made the same trade with CNBC this week as I did last. Specifically, I've given them Olympian two-a-day efforts for the first 4 days this week in exchange for a 3-day weekend . As if that weren't enough to start my countdown to the end of Fast Money's 5–6 taping tonight (8:31, as I type), I'm taking all next week off as well. If a flame burns brightest just before going dark I oughta be about full supernova tonight at 5:45.

Here's what I'm watching as I don my asbestos crash helmet:

  • Toyota (TM) cut its sales goals for 2009 by 6% while we were sleeping, citing "slowing global demand". I believe the latter phrase replaced Toyota's placing the blame for weak earnings efforts on weakening truck demand in the US as of last week. It's a globalized world, Minyans. Like marriage, globalization is a "for better and worse" proposition (emphasis mine).

  • IOC President Jacques Rogge has criticized Jamaican sprinter Usain Bolt for showing what Rogge perceived to be a lack of respect to fellow competitors when Bolt set World Records in the 100 meter and 200 meter dash races. "That's not the way we perceive being a champion," Rogge harrumphed, presumably alluding to the English prep-school competitions where one sweater-clad gentleman nipped out another at the wire then sat for a cup of tea, which for the basis of the modern Games. Sports is about Bolt. It's about Pelé. Sports is having the courage to find out what you can really do. And what you can't. Everything else is artifice.

  • Speaking of which, we had a couple different debates on TV yesterday regarding whether or not the Chinese government was going to wrest increasing amounts of control from Western casino companies such as Wynn Resorts (WYNN) Las Vegas Sands (LVS) and MGM Mirage (MGM). The casino companies are reliant on Macau, rather than the suddenly moribund Las Vegas, for future growth. Personally, I strongly believe the Chinese will shake down the casinos. I believe the government will trade an increasingly large percentage of the skim from the Western companies in exchange for allowing Chinese citizens to visit Macau. The analyst we had on last night countered that the Chinese would be "stupid" to start doing such a thing "at least for a couple years, until the construction is done." Suffice it to say, if "a couple years" is the best the aggressive bulls can offer me, I find it impossible to be bullish casino stocks.

  • What can we be bullish on, if only for a trade? How about the USO with a stop at 89.50? How about Potash (POT), specifically if it manages to close over $180 and makes a break for $200?

  • It offends folks when traders change direction on trades. We're traders, people. Until the uptrend is recaptured I follow the trading countertrends rules: 1) Set even tighter stops and use more discipline. I don't like POT unless it closes over $180 or moves back to $160 (the latter is decent looking support but...) 2) Broken bigger trends mean even tighter discipline. Never, ever, chase snapback rallies. 3) Unlike trading when the uptrend in on your side, set specific upside targets (If I get long the USO, I sell at $100 and don't look back. If Potash breaks $180 and I get long, I'm looking to cash up anywhere near $200).

  • Or you can choose to do absolutely nothing, since countertrend trading is where the sharks swim. My greater opinions on the coal, crude and ags names have changed not a whit. The charts have. I'm just changing my strategy accordingly and sharing the process with y'all.

  • Make it a great day, Minyans and don't forget to check out the BMX racing from Beijing: Guys in purple mohawks racing little kid bikes. Now that, no doubt, is what Jacques Rogge considers the Olympian ideal.

  • What's the deal on Microsoft (MSFT) hiring Jerry Seinfeld for multiple millions of dollars? Did this company bury itself in a Kaczynski-like zone of cultural solitude a decade ago? Jerry Seinfeld? Really? As a shareholder of Microsoft I feel entitled to insist that Steve Ballmer be chained to a chair and watch Bee Movie before the ink on this deal is dry. There are only three possible conclusions one can draw from Bee Movie: 1) It's horrible. 2) It's the most animated Rene Zellweger has looked since the first Bridget Jones. 3) Jerry Seinfeld isn't going to sell a lot of computers.

For more on casinos, check out Hoofy and Boo's always astute report.
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